Land is priceless, Indian farmers tell developers / Many refusing huge sums from builders of 'economic zones'

Anuj Chopra, Chronicle Foreign Service

Published
4:00 am PDT, Monday, June 18, 2007

Kiran Mhatre, 33, a local farmer showing me his surplus rice produce. He grows nearly 12 quintals on rice on his 3 acre farm every year -- more than enough to feed his family of five for the whole year. Photo credit: Anuj Chopra, Special to the Chronicle
Ran on: 06-18-2007
Kiran Mhatre earns $600 a year and feeds a family of five on 3 acres. A company recently offered him $24,000 for it. He said no. less

Kiran Mhatre, 33, a local farmer showing me his surplus rice produce. He grows nearly 12 quintals on rice on his 3 acre farm every year -- more than enough to feed his family of five for the whole year. Photo ... more

Photo: Anuj Chopra

Photo: Anuj Chopra

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Kiran Mhatre, 33, a local farmer showing me his surplus rice produce. He grows nearly 12 quintals on rice on his 3 acre farm every year -- more than enough to feed his family of five for the whole year. Photo credit: Anuj Chopra, Special to the Chronicle
Ran on: 06-18-2007
Kiran Mhatre earns $600 a year and feeds a family of five on 3 acres. A company recently offered him $24,000 for it. He said no. less

Kiran Mhatre, 33, a local farmer showing me his surplus rice produce. He grows nearly 12 quintals on rice on his 3 acre farm every year -- more than enough to feed his family of five for the whole year. Photo ... more

Photo: Anuj Chopra

Land is priceless, Indian farmers tell developers / Many refusing huge sums from builders of 'economic zones'

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2007-06-18 04:00:00 PDT Malegharwadi, India -- Under a scorching sun, Kiran Mhatre toils in a rice paddy before the onset of annual monsoon rains. The mercury rises to a searing 105 degrees, but Mhatre works tirelessly. The harvest from his 3 acres of land will feed his family of five for the rest of the year.

Farming is what 33-year-old Mhatre and his family have been doing for generations. It's the only way he knows how to eke out a living. And so when Reliance Industries, an Indian manufacturing giant, recently offered him $24,000 for his patch of land -- an astronomical sum for a peasant who typically earns $600 a year -- he declined.

"I won't part with an inch of my land," said Mhatre.

As India's economy surges and available land disappears in congested cities, Reliance and other companies are frenetically buying up vast tracts of farmland and converting them into huge industrial parks known as Special Economic Zones, a concept borrowed from China.

Spared from the country's rutted roads, erratic power supply and punishing tax laws, these industrial enclaves are expected to create millions of jobs and billions of dollars in foreign investment. In the past two years, the government has approved 111 such zones -- 24 just last week -- and there are plans to approve 100 more by the end of this year, according to the Ministry of Commerce.

But there is a problem: the lack of available land in a huge country where agriculture is still the mainstay.

Along the coastal belt of the western state of Maharashtra, where fertile farms and salt flats are encircled by low-lying marshes, Reliance wants to build India's largest Special Economic Zone, which would displace 45,000 farmers.

But like Mhatre, most area farmers refuse to part with their land. Many eke out a living growing rice and bamboo cane for furniture, rearing livestock, fishing and cultivating Salvadora persica, a tree whose twigs are used to maintain dental hygiene.

"The money they're offering will dry up sometime or the other," Mhatre said. "But our lands will feed our families throughout our lives."

Despite an annual economic growth rate of more than 9 percent, a burgeoning high-tech industry, buzzing call centers and glittering malls, India is a nation that is still largely poor, uneducated -- Mhatre, for example, has never attended school -- and rural.

Some experts doubt that the masses will benefit much from projects like the economic zones.

"It is misleading to justify heavy investments in capital-intensive projects on the grounds that they will create employment," said Jean Dreze, a professor at the Delhi School of Economics. "This isn't likely to do much good for the rural poor."

For now, the government says it will not acquire agricultural lands by force, because previous attempts have failed miserably.

In March, at least 14 peasants were killed and 45 injured in clashes with police in Nandigram in West Bengal state, after the seizure of 12,000 acres for a chemical plant and shipping yard for Indonesia's Salem Group. Last month, two Indian officials of POSCO, a South Korean steelmaker, were held hostage for two days by opponents of a proposed 4,000-acre steel plant in the eastern state of Orissa. The $12 billion project threatens to displace more than 20,000 farmers.

To avoid future violence, lawmakers say they will introduce legislative guidelines for resettling those displaced by the economic zones while guaranteeing employment for at least one person per family.

At the same time, some economists say India must turn to industry to create badly needed jobs, because the farm sector grew by just 2.3 percent over the past three years and grain production remains stagnant. Low crop yields, high interest rates charged by unscrupulous lenders, and competition from farmers employing more technological methods have caused thousands of peasants to commit suicide in recent years in India's south and west.

Sreemati Chakrabarti, a professor of Chinese studies at the University of Delhi, points to China as a prime example of the success of Special Economic Zones. Since 1979, China has built more than 600 zones, which she says have contributed to the country's 11 percent annual economic growth rate. She notes that Shenzhen, a sleepy village until 1980, became a bustling city virtually overnight from an infusion of nearly $30 billion in foreign investment in economic zones in the surrounding region.

"Today it looks almost as advanced as Tokyo, with its high-rise office buildings, fashionable hotels, wide roads and excellent public transport system," Chakrabarti said.

In dusty Malegharwadi, however, dirt roads remain pitted with bone-jarring potholes, water shortages are common, the power goes on and off, and the nearest hospital is some 50 miles away.

Yet only two of the village's 60 families have sold land to Reliance.

"It was a really good offer," said Lakshman Rao, who sold 2 acres for $16,000 so he could marry off a daughter and pay for medical treatment for an ailing son.

But most residents here are armed with bamboo sticks to keep Reliance officials from entering the village.

"These farmers are ready to give up their lives to protect their land," said Vaishali Patil, an anti-economic zone activist in the nearby city of Pen.